Is your panel nested inside another panel or any other type of container which has Visible set to false?
For such a situation the behaviour your observed is reproducable. It would make sense to forbid to set visibility to true for the inner container if an outer container is invisible since that means nothing inside must be visible, even not the empty div of the inner panel.
The Visible property seems to be dependent on the visibility of outer containers, for instance:
<asp:Panel ID="Panel0" runat="server" Visible="false">
<asp:Panel ID="Panel1" runat="server" Visible="false">
Content...
</asp:Panel>
</asp:Panel>
This code is as expected (make outer container visible first, then inner container):
Panel0.Visible = true;
// Now Panel0.Visible returns true and Panel1.Visible returns false
Panel1.Visible = true;
// Now Panel0.Visible returns true and Panel1.Visible returns true
This code is somewhat surprising (make inner container visible first, then outer container):
Panel1.Visible = true;
// Now Panel1.Visible returns false (!, your issue) and Panel0.Visible returns false
Panel0.Visible = true;
// Now Panel1.Visible returns true (!!) and Panel0.Visible returns true
It seems that setting and getting the Visible property is "asymmetric": The Setter seems to place a flag in the control, but the Getter to return a calculated value which depends on the visibility of the outer elements and the visibility of the control itself.
Not sure if this will help you at all.